Virginians
Incomes May Be Rising, But Dramatic Gaps Between Richer And Poorer
Continue To Widen

Dec. 22, 1999 -- Virginians incomes
have shown a healthy recent increase, even after adjusting for inflation.
This is the third consecutive year of gains in real income, according
to a new study from the University of Virginias Weldon Cooper
Center for Public Service.

Furthermore,
the income gap between richer and poorer Virginians continues to
show a dramatic increase, and incomes in many central cities and
rural areas are staying well behind suburban incomes, according
to the report by economists John L. Knapp and Stephen C. Kulp.

The
study analyzes adjusted gross income (AGI) reported on Virginia
tax returns for 1997, the most recent data available.

In
1997 the state median AGI for married couples was $48,087. This
represents a 5.7 percent gain over the previous year, or after adjusting
for inflation, a 3.4 percent gain. This was the third year of gains
in real income. The 1997 figure was slightly below real income in
the record year of 1988. According to Knapp and Kulp, if the series
could have been adjusted for tax law changes, it is likely that
the 1997 figure would have set a new record.

Median
income for married couples is roughly equivalent to median family
income. But, unlike census income data, it reflects capital gains
from the recent runup in the stock market, the authors said. The
median is the level at which half reported more income and half
reported less.

The
five localities with the highest median AGI for married couples
were all located in Northern Virginia and all had incomes far above
the state as a whole.

They
are:

Fairfax
County, $75,982
Falls Church, $75,474
Loudoun County, $74,376
Arlington County, $66,347
Prince William County, $62,541

The
bottom five localities were in isolated rural areas of western or
coastal Virginia.
They are:

Grayson
County, $28,020
Northampton County, $27,773
Dickenson County, $26,770
Highland County, $26, 824
Lee County, $25,058

Roughly
three out of ten returns in those localities showed incomes of less
than $15,000, a figure below the federal poverty level for a family
of four, Knapp and Kulp said.

The
study shows the very large concentration of income in Northern Virginia.
In 1992 the area accounted for 36 cents out of every dollar of Virginia
AGI. By 1997, the areas share had risen to 38 cents.

Income
inequality "has increased dramatically" in the state,
the economists said. An index of income concentration that reflects
inequality rose steeply in 1997 for the third consecutive year and
has been rising for two decades.

Factors
include a growing number of single family households, a growing
disparity based on education levels, and generally low wages in
service jobs, the authors said. The booming stock market has resulted
in large gains for many upper income households and added to the
growing gap, they pointed out.

The
index rose most rapidly in Albemarle County in central Virginia.
Goochland County near Richmond showed the highest inequality.